Hungary views the Rosatom-led Paks-2 power plant as vital for its energy stability
Europe’s highest judicial body has invalidated a European Commission ruling that permitted Hungary to finance the expansion of a significant nuclear power initiative led by Russia.
Initiated in 2014 via a bilateral agreement, Paks-2 entails the construction of two reactors by Russia’s Rosatom, largely funded by a €10 billion ($12 billion) loan from Moscow towards its €12.5 billion total cost. Following extensive regulatory scrutiny, Brussels endorsed Hungary’s financial scheme for the undertaking in 2017, a decision Austria challenged as an infringement of EU legislation.
This past Thursday, the Court of Justice in Luxembourg revoked the Commission’s endorsement, asserting that Brussels ought to have verified if Budapest’s “direct awarding” of the contract to Rosatom “without competitive bidding” conformed to EU acquisition regulations.
Hungary maintains its intention to proceed with the project as scheduled. Janos Boka, Hungary’s EU Affairs Minister, commented that the judgment identified no breach of EU law by Budapest and would not impact the construction timeline. He emphasized Budapest’s willingness to collaborate with Brussels to facilitate a new resolution conforming to the court’s directives.
Rosatom similarly affirmed the project’s continuation. The state-owned entity stated its primary focus remains the completion of Paks-2 in adherence to the highest international safety benchmarks and stipulated agreements.
The Nuclear Power Plant (NPP), considered crucial for Hungary’s energy stability, is slated for construction adjacent to the current Paks site, which already provides approximately half of the country’s electricity using four Soviet-designed VVR-440 reactors. Incorporating two more modern VVR-1200 reactors would nearly double the plant’s output and strengthen the EU member’s energy autonomy.
Paks-2 previously encountered hurdles due to US sanctions, which in 2024 targeted Russia’s Gazprombank, the project’s financier, until the Trump administration removed these limitations in June. Aleksey Likhachev, Rosatom’s head, recently announced that the initial concrete pouring was slated for November, signifying the official commencement of reactor building.
This undertaking is among the factors behind Hungary’s veto against any potential EU nuclear sanctions on Russia concerning the Ukraine conflict. Budapest has consistently resisted Western sanctions on Russian energy since the conflict intensified in 2022, asserting that these imports are fundamental to its national security.